The company built up its reputation by brewing popular craft beers such as Samuel Adams, but it has branched out into the hard seltzer category in recent years.
Hard seltzers were shaking up the US drinks industry and seizing market share from beer at a rapid rate, but demand has now started to fizzle out.
Boston Beer Co. delivered a disappointing earnings report in July, when low demand for its Truly hard seltzer brand dragged down its quarterly revenue.
Chief executive David Burwick admitted the firm had “overestimated the growth of the hard seltzer category”. The company’s share priced swiftly decreased by 26%. It has continued a downward spiral ever since, leading Bloomberg to brand it an “unloved midcap” this week.
The share price suffered its sharpest fall since July when Boston Beer Co. pulled its guidance.
“The company now expects to incur hard seltzer-related inventory write-offs, shortfall fees payable to third-party brewers and other costs that will be expensed during the remainder of fiscal 2021,” Boston Beer said.
“Industry reports have estimated that the full-year 2021 volume for the hard-seltzer market retail sales will have over 100 million fewer cases than the volumes estimated in May 2021 and over 30 million fewer cases than the volumes estimated in July 2021.
“While demand for the company’s hard-seltzer products continues to grow at faster-than-category rates in measured off-premise channels, we believe there will be continuing uncertainty about hard-seltzer demand trends for the remainder of 2021.”